Agro Supply

CIFAR Alliance and Mastercard Center for Inclusive Growth

"Building the resilience of smallholder farmers with climate-smart agriculture"

Company Description

Agro Supply helps smallholder farmers across Uganda to purchase quality inputs through our innovative Save to Buy model delivered on phones. They source high-quality inputs from across the world and leverage our large network of agents and farmers to distribute the inputs at the farmer's doorstep. To date, they have served over 25,000 farmers through innovative financial and agricultural products and services.

Vision of AgroSupply

Empowering farmers with quality inputs, financial inclusion, and crop protection through innovative solutions, including layaway payments, high-quality inputs, training, and area yield index insurance.

The Solution

Agro Supply's innovative four-tier model is set to transform agriculture, focusing on accessibility, financial inclusion, and crop protection for farmers.

Layaway Payments

Agro Supply enables farmers to save gradually, eliminating the need for traditional microcredit.

Quality Input

They deliver top-notch inputs, such as drought-resistant seeds, after a few months of saving, thanks to their in-house R&D team and partnerships with industry leaders like Seedco and Advanta.

Training and Support

Farmers receive training and guidance through physical and digital channels to adopt modern farming techniques.

Area Yield Index Insurance

Embedded in seed prices, this insurance offers comprehensive coverage against various yield-affecting risks, ensuring both security and affordability.

Agro Supply's mission is to empower farmers, promoting sustainable agriculture and resilience for the future.

Business Model:

Agro Supply's business model is multifaceted, prioritizing farmer well-being and revenue generation:

Layaway Payments: Income from farmers' gradual savings for agricultural inputs, potentially involving fees or interest charges.

High-Quality Inputs: Revenue from sourcing and delivering quality agricultural products through supplier agreements with Seedco and Advanta.

Customer Service and Training: Builds customer loyalty, indirectly contributing to overall success.

Area Yield Index Insurance: Additional revenue from insurance embedded in seed prices, covering yield losses due to various risks.

B2B Sales: Around 20% of annual sales are generated through B2B transactions with commercial farmers, likely resulting in higher profit margins.

Their Plan to Scale:

Since beginning operations in Uganda in 2018 (specifically in Northern Uganda, West Nile, Eastern Uganda, and Karamoja regions), AgroSupply has experienced strong year-on-year growth of over 50%. In 2018, AgroSupply had 20 farmers, and at present, they have more than 20,000 farmers, of which 48% are women, utilizing their system. AgroSupply's revenues have consistently grown year by year, at a rate of approximately 50%.

Through the provision of drought-resistant hybrid seeds, AgroSupply's farmers have realized significant increases in yields per acre, with maize seeing a 90% increase, soybean an 80% increase, sorghum an 85% increase, and sunflower a 90% increase. This increase in yield has translated to an additional profit of about $55 per acre per season for AgroSupply's farmers.

Additionally, the company has established a network of over 140 village agents who play a crucial role in distributing scratch cards, providing training, and facilitating communication between AgroSupply and the farmers on the ground.

Impact

Agro Supply's impact on the agricultural landscape and rural communities is both extensive and significant. The company's multifaceted approach and initiatives have brought about numerous positive changes:

Crop Diversity and Soil Enrichment: Agro Supply's efforts in promoting diverse crops and soil-enhancing practices have led to richer and more resilient soils. This translates into increased yields and ensures the livelihoods of smallholder farmers.

Empowering Women: With nearly half of its 20,000+ farmers being women, Agro Supply is contributing to gender empowerment and economic inclusion in the regions they operate.

Rural Job Creation: Through its network of village agents, Agro Supply has not only extended its services but also contributed to the creation of rural jobs, thereby improving the overall economic well-being of these regions.

Financial Literacy Training: By offering financial literacy training and allowing farmers to save through USSD codes, Agro Supply is enhancing the financial acumen of smallholder farmers, enabling them to better manage their resources.

Resilience Building: In the face of increasing drought conditions, Agro Supply's provision of drought-tolerant seeds ensures that farmers can continue to produce good yields, even in adverse environmental conditions. This resilience-building is essential in the current agricultural landscape.

Nutrition Enhancement: Agro Supply is not only focused on crop yields but also on improving the nutrition of farming families. By introducing crops rich in essential vitamins and proteins, they are addressing the nutritional needs of these communities.